An official in the Washington State Auditor’s Office said Thursday the state will expand its review of the Island County Fair Association to determine if fair officials are following state laws that guarantee the public’s access to records and meetings.

Earlier this month, the state auditor’s office said it would review a controversial land sale approved by the fair association last year. The fair association sold 10 acres of donated land near Langley for $120,000, but refused on Jan. 30 to release public records on the land sale and other donations.

In a response to a Jan. 24 public records request by The Record, fair administrator Sandey Brandon said the fair association did not have to release its records because they were not public documents due to the association’s non-profit status.

Brandon also said the state Auditor’s Office was “erroneous” when it said in a 2003 letter to the county that the fair association was required to follow state laws that give the public access to fair association meetings and the association’s records.

Mindy Chambers, spokeswoman for the State Auditor’s Office, said its view on the association had not changed.

“We have not changed our opinion on this,” Chambers said.

“They have to comply with all the laws that the county would have to comply with; that would extend to records, meetings, bid laws and etc.,” Chambers said.

“We’re going to take a look at this,” she said.

Chambers also noted that Island County’s regulations on the fair association’s responsibilities specifically state: “The association and its board of directors shall operate in accordance with … all applicable laws of Island County and the state of Washington.”

Brandon said earlier that the association was not required to follow the state’s open records laws because it was a private, non-profit corporation.

But Chambers said the association actually acts as an agent for the county because it was designated by Island County officials as the agency to put on the county fair. That designation is spelled out in the Island County Code, the set of rules that cover everything the county regulates, from zoning to pet licenses.

“The fair association is acting as an agent for the county,” Chambers said. “This is even written into their contract.”

The state Auditor’s Office is charged under the state Constitution to review the actions of government entities throughout the state; it currently relies on the legal advice of an assistant attorney general, Chambers said.

The expanded review of the Island County Fair Association comes after the state said it would look into a land sale approved by fair officials in 2005. The land was sold in January 2006.

The land sale came to light amid a continuing feud over a road easement between the city of Langley and fair officials. Fair officials have repeatedly rejected Langley’s attempts to build a city street across the southern end of the fairgrounds to lessen traffic troubles, and have said the new road would make part of the fairgrounds unusable.

Langley filed a condemnation lawsuit in October against Island County, which owns the fairgrounds, to get the land needed for the new road. The Island County Fair Association is a party to the lawsuit and is also fighting Langley in court.

County officials contacted this week would not say conclusively that they agreed with the state auditor’s view of the fair association.

“I don’t have an official opinion on that; I don’t represent them,” said Island County Prosecutor Greg Banks.

County Commissioner Mike Shelton said he doubted the association was required to follow state laws on public access.

On Thursday, Shelton — who was in Olympia

attending a conference — sent an e-mail to The Record saying the public access question was a legal issue which probably should be answered by legal counsel.

“But I would say that I don’t believe that a 501 C3 is obligated under public disclosure,” Shelton wrote.

County officials including Shelton had a different view in the weeks before the state auditor told county officials in November, 2003, that the fair association was required to follow state laws on public records in meetings.

According to the minutes of the commissioners’ meeting on Sept. 10, 2003, Shelton encouraged that a meeting should be held between the fair board and county commissioners. County officials — including the prosecuting attorney’s office — noted that while the fair board and fair association were operating as a nonprofit entity, it did not mean the organization wasn’t required to adhere to its responsibilities under state law.

Late this week, fair officials said they were taking another look at providing the records requested by the newspaper.

Dan Ollis, the fair association chairman, said he has told Brandon to release all records pertaining to the fair board.

He did not say when the records would be available, and also said the fair association is seeking a legal opinion from a new lawyer concerning the county code.

Ollis said the organization has not decided if the fair board or the association will seek legal advice. Also uncertain: who would pay the lawyer bills.

Fair association president Diane Divelbess said even though she does heavily rely on the advice of fair secretary Marilyn Gabelein and fair administrator Brandon, she didn’t think there was anything in the association’s records that couldn’t be shared with the public.

“I can’t think of anything that you wouldn’t be free to peruse,” Divelbess said.

No public records had been made available to the newspaper by Friday, however.

Divelbess said the refusal to release the wrecords may be a matter of principle.

“We’ve been feeling the auditor’s opinion was based of a misunderstanding of the fair association’s status,” she said.

Critics of the fair board’s refusal to grant Langley the road easement have repeatedly asked fair officials to name the anonymous donors who are financing the fair association’s legal battle. Many who live near the fairgrounds support the new road through the fairgrounds, and are worried about increased construction traffic in Langley once construction begins on the Highlands, the largest housing project in city history.

Divelbess said she is not aware of the details, but she was told the association had a private donor to pay for the association’s legal bills.

“I keep hoping things keep calming down. I see huge legal bills brewing together on the horizon,” she said.

“I understand that we have private donors. My hope is that the private donor doesn’t go away,” Divelbess said. “I am not thrilled at facing the legal bills.”

The Record requested a number of documents under the state Open Records Act after donations to the fair association came under question in recent weeks. Questions also arose over what the fair association did with the money from the controversial land sale.

While county regulations say the fair association is required to put donations to the fair in the “County Fair Fund,” an account controlled by Island County and subject to county oversight, the fair association created a separate bank account for the money, outside of the reach of the county treasurer’s office. Fair officials have said the association plans to put the money into an endowment fund.

Divelbess said she joined the association board after the property was sold. The details of the sale were worked out by Marilyn Gabelein, she said.

Gabelein is both the secretary for the fair board and the fair association.

Divelbess added that the Watermans, the donors of the property, were longtime supporters of the fair and hoped the land could be used for the fair.

The association hopes that scholarships can be funded from the interest from the money from the land sale, Divelbess said.

The money from the land sale are in certificates of deposit while the association works out the details of the fund with its lawyer, she said.

Currently, the fair association has two boards that are involved with the county fair.

The fair board is led by Ollis and vice chairman Jon Gabelein; the Island County Fair Association is led by Divelbess and vice president Sally Berry.

Brandon did not respond to requests for comment by The Record.

Michaela Marx Wheatley can be reached at 221-5300 or mmarxwheatley@southwhidbeyrecord.com.